3 Numbers To Watch: EU Money Supply, US Consumer Comfort, US jobs

A busy day of economic news awaits for Thursday, including revised second-quarter GDP data for Britain (08:30 GMT) and the US (12:30 GMT). But don’t let the backward-looking big picture numbers distract you from other reports that offer more timely insight on the outlook for the macro trend. In particular, keep an eye on today’s monetary news from the European Central Bank, followed by two numbers for the US: initial jobless claims and the Bloomberg Consumer Comfort Index.

EU Money Supply (08:00 GMT):The Eurozone may crawling out of its recession ditch, but to the extent the still-nascent recovery needs monetary support there’s reason to wonder and perhaps worry. Even the optimists recognise that the rebound is fragile at best and so a lot could still go wrong before there’s a solid case for thinking that most of it will go right. That brings us to today’s monthly update on monetary data from the European Central Bank and the recent deceleration in growth on this front.

Both narrow (M1) and broad (M3) monetary aggregates have been posting noticeably lesser rates of expansion in recent months. The downshift may please inflation hawks, but Europe’s challenge is still primarily in other areas, namely, boosting growth, promoting spending, and providing adequate if not ample credit all around. All of those crucial goals will be increasingly tough to secure if liquidity growth continues to slide. The last thing the Eurozone overall needs right now is a fresh dose of disinflation/deflation. Today’s report will provide fresh insight into whether the continent is still moving closer to that counterproductive state of monetary affairs.

US Initial Jobless Claims (12:30 GMT): Last week’s update on new filings for unemployment benefits wasn’t all that satisfying in terms of clarifying the confusion over the recent computer glitch that reportedly took a toll on the integrity of the data. Two weeks ago the claims data dropped sharply, falling under 300,000 on a seasonally adjusted basis—the lowest since 2006. Analysts warned that statistical payback would follow a week later. But there was only a mild rise in new claims for the week through September 14 vs. the previous update. Will today’s release dispense the blowback that some economists say is inevitable?

Perhaps, although the consensus forecast sees only a rise to 330,000 for today’s release. That’s a sizable increase from last week’s 309,000, but it’s still well short of a dark sign for the labour market. Let’s assume that today’s claims pop to 330,000. In that case, new filings will still be 10 percent lower versus a year ago. That’s a persuasive clue for thinking that the labuor market will continue to post moderate growth. By contrast, we’ll have a true warning sign if and when the annual rate of decline that’s prevailed for some time turns into a consistent run of year-over-year increases. But that red line is still nowhere in sight and today’s update isn’t expected to tell us otherwise.

US Bloomberg Consumer Comfort Index (13:45 GMT): Sentiment in the land of consumers has been soft lately, as Tuesday’s report from the Conference Board reminds us. “Consumer Confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed,” notes the organisation’s director of economic indicators in a press release with this month’s update of the Conference Board Consumer Confidence Index. True, the benchmark is still close recent highs. But it’s still reasonable to wonder if consumers are becoming increasingly gloomy about the future after the recent rise in interest rates, which threatens to be a new economic headwind.

Much depends on how far and how fast rates rise from here in the months ahead. Meantime, the jury’s still out on where the mood on Main Street is headed, although today’s weekly update of the Bloomberg Consumer Comfort Index may provide a valuable clue. This benchmark offered an early sign that sentiment was faltering lately. The good news is that this index turned up rather sharply in last week’s update. Deciding if that’s noise or genuine improvement will depend on whether we see another gain. Whatever today’s number reveals, it’ll provide additional guidance for thinking about tomorrow’s reports on personal income and spending and the Reuter's/University of Michigan's Consumer Sentiment Index for the US.